Sales: According to the Cullman MLS, there were 47 residential sales in Cullman County during January, an 11.9 percent increase from one year ago. Current sales volume is 10.8 percent above the five-year January average of 42 closed transactions. Two more resources to review: Quarterly Report and Annual Report.
For all of Cullman’s real estate data, click here.
Forecast: January sales were 15 units or 24.2 percent below the Alabama Center for Real Estate’s monthly forecast. ACRE forecasts a total of 1,011 residential transactions in Cullman County during 2018. There were 852 actual sales in 2017.
Demand: January residential sales decreased 39 percent from the prior month. Historical data indicate that January residential sales on average (’13-’17) decrease from December by 3.8 percent. Homes selling in Cullman County in January averaged 157 days on the market, an increase of 42.7 percent from one year ago.
Supply: A total of 523 homes were listed for sale in the area during January, representing an increase of 9.6 percent from one year ago. Total listings in the area increased 4.4 percent from the previous month. This is consistent with historical data trends from 2013-17 indicating that inventory on average increases from December by 0.6 percent.
Seeking balance: The inventory for sale divided by the current sales volume equals the number of months of supply. The market is considered to be in balance at approximately 6 months of supply. The inventory-to-sales ratio in January was 11.1 months of supply, down from 11.4 months one year ago.
Pricing: The median sales price in January was $119,900, a decrease of 4 percent from one year ago. The median sales price was 25 percent below the prior month. Historical data trends from 2013-2017 indicate that the median sales price on average drops by 2.1 percent from December. Pricing can fluctuate from month to month as the sample size of data (closed transactions) is subject to seasonal buying patterns. ACRE recommends consulting a local real estate professional.
Industry perspective: The recent headlines in the real estate world have revolved around rising interest rates. As of Jan. 31, the interest rate on a 30-year fixed-rate mortgage was 4.38 percent. This is up from 4.18 percent on Jan. 10 and up from 4.08 percent on Dec. 6, 2017. The stock market has rebounded somewhat from its large selloff on Friday, Feb. 2, and Monday, Feb. 5, as investors adjust from an accommodating monetary policy to one with some inflation and higher interest rates. The recent market decline is a signal of a return to normalcy and higher debt costs. Rising interest rates, however, do not cause housing activity to come to a halt, in the same way that rising rates do not cause businesses to go into hibernation. In the spring of 2006, the Federal Reserve stopped raising interest rates after raising rates 16 times over a three-year period. The economy was performing well during this time (2004-2005) of rising interest rates. The Great Recession happened, interestingly enough, at a time when interest rate increases were halted.
Home ownership rates increased to 64.2 percent during 2017 after falling to a post-1965 low of 62.9 percent in 2016. Not surprisingly, home ownership rates peaked during 2005 at approximately 69 percent. Millennial home ownership rates are also on the rise as their employment situations continue to improve. Millennials, in fact, have been recently credited with an improvement in suburban housing markets as not all are city dwellers. This rise in home ownership was highlighted recently at the annual TrendLines 2018 program in Washington, D.C., with an analysis of Census Bureau housing data presented by Sage Policy Group, Delta Associates and Transwestern. The following excerpt is from the closing paragraph from the home ownership report, and is encouraging news for residential real estate markets across the nation:
“This year, the most common age in America will be 26 years old. There is also an abundance of 25- and 27-year-olds. All of these people are millennials, America’s largest and most educated generation. As more of this demographic block marches into their 30s, demand for ownership opportunities will rise. While there may be downturns that occasionally suspend these demographics, the next decade stands to emerge as a period of rapidly expanding home ownership and single-family homebuilding in America.”
Click here to generate more graphs from the Cullman January Housing Report, including Total Sales, Average Sales Price, Days on the Market, Total Inventory and Months of Supply.